A month ago, I lost my job. Details aren’t necessary, as they’re not relevant. What is relevant is for the past 16 years I’ve been used to steady paychecks. After losing my job, I moved into a completely new realm of no paycheck every two weeks. I did receive the customary monies one usually does upon being laid off, which should last me a few months by budgeting smart. Employment insurance from the government doesn’t kick in until 1) they consider those “monies” received depleted and 2) I’m still without full time employment.
The unfortunate circumstance is that I still have debt to pay and at present, have no income coming in. Although I’m not panicking, I am worried. After all, I have a large amount of debt to pay back and was used to throwing a large portion of my income at it. I want my debt GONE. With no income coming in, I feel like a fish out of water, helpless and flailing on the sandy beach baking in the sun.
It will prove challenging, but here’s how I’m learning to cope with job loss, emotionally and financially.
What is the minimum I can survive on?
The very first thing I did was immediately take stock of what money I received, what I had saved and what the absolute minimum was that I could survive on. I was ruthless and you have to be. Your old lifestyle is now on hold. That means no more Starbucks Soy Caramel Macchiato once a week. The good thing, of course, is now you’re not commuting; so many expenses go way down.
Knowing that my car was the most expensive item in my budget, I started there. Thankfully, I paid it off in full before I was let go. Phew! I immediately said, “Car, you’re going to be in garage jail for a long while.” The only time it comes out is for a Costco run, or any other activity that is beyond walking distance. I allowed for car insurance and $80 a month in gas, which is roughly two tanks of gas. More than plenty for at least one outing a week. Yep, I said ONE outing.
Next up was my cell phone. Since I no longer used it for work, I slashed the extra voice mail package that was costing me money. I have no home phone so I left the plan in place, which is a very good one and the cheapest. Regardless, I’m saving $5.65 with the voice mail cut.
Now here’s where ruthless came in. Entertainment? Nope. Restaurants? Only December for one Christmas get together with friends, then no more. Books? Nope. Personal Care? Nope. Not unless it’s toothpaste or deodorant. Education? On hold. You get the idea.
I went back to bare basics. What were the necessities to survive? In essence, it’s how I should have been living all along and by now, I’d have a $50,000 emergency fund. Anyways, no shoulda, woulda, coulda’s, that’s the worst thing to do at this point.
What is my basic budget? To live on $1025 a month or less.
The budget consists of:
Car insurance $122.75
Home insurance $27.71
Life insurance $17.84
Mobile phone $90.05
Groceries $150 or less.
Fuel $80 or less.
Pet food and supplies $66.45
Debt repayment minimum $400
Why no rent – I negotiated extra work around the house in exchange for my normal $150 rent payment. I know, not everyone can do this. But even if you have a landlord, I’d ask anyways. You never know, you might knock $100 off your rent.
Why no health and dental – I haven’t made the decision to purchase this yet. I’ve received one quote at $102 a month for only Health. I plan on shopping around first and because I’m single, I’m not entirely sure I need to fork over much-needed funds for it. We’ll see. If you have a family, I highly recommend purchasing a plan if you are able.
Surprisingly, my mind has embraced my new extreme frugality mode and is getting along fine. I’ve noticed that creativity has come back into my life and I now think in terms of how can I do that for even less. I’ve always been frugal in most areas of my life; it was just clothing and travel that have been my weak spots.
In your newfound life state, temptation is to become depressed, lazy and wallow in an inordinate amount of self-pity. While a little bit of lounging around and relaxing is deserved, it can lead to thinking too much and inevitably becoming depressed about your unemployed state. While I did lounge for a bit, I’ve focused every morning on what I’m grateful for and in having a positive state of mind. Now is the time to get exercising and get your mind and body back in shape. Walk, run, bike, do Yoga but get moving!
Get a game plan going
1. Create goals
You’ll want to create goals around finding new work in addition to life goals. You need to address goals around how many hours a day will you job search, how many hours looking for side hustles, networking, getting in exercise, me time, etc.
2. Sell what you can
The money won’t last and in this economy there’s no guarantee when you’ll find a new job. A friend of mine was out of work for a year after quitting his job. Be prepared for the long haul.
While I haven’t decided to sell my car yet, I am going around the house and selling all those items that I didn’t have the time to get onto eBay or Kijiji – old computer, doll collection, and other items.
Why am I not selling my car? Well, it’s not emergency time yet. If I’m frugal enough, I can survive several months. I’ll also need my car to get to job interviews. It’s more convenient than transit and less expensive than Uber or taxis.
3. Hustle, hustle, hustle!
You may have noticed that I have zero Starbucks in my budget. Well, that’s because I complete surveys to get gift cards. It takes me about a month to get a $10 gift card.
I’ve also signed up to be a Search Engine Evaluator, which could potentially pay $13.50 USD an hour. It’s all part-time work but helps pay the bills.
4. What can I get free?
If you’re not already, start thinking in terms of what can I get free. The library has become even more of a friend for me. I regularly take out movies, TV shows, music and books. It keeps me from buying anything and keeps me entertained.
Eventually, if it comes down to it, I’ll cancel my Internet and use the free resource rooms and free Wi-Fi for job searching and writing.
Keep a regular schedule
For the first few weeks, I was in decompress and detox mode. I was under an extreme amount of stress and realized I would need a few weeks to unwind. Believe me, I was so tightly wound that a few times I’d forgotten to put my car in park. Ugh. No serious consequences thankfully. Stress has serious impacts on your brain and overall health. Be mindful and take time to unwind if you can.
I gave myself a few weeks of extra sleep and then it was back to early morning wakeups. My routine is the same as when I was working and it’s important to do this for several reasons. When you do find another job, you’ll be in the zone to jump right in and it will keep you from getting lazy.
Now that I’m a month in to this new life change, I’ve finally relaxed. I’ve also let go. This is key. Please, please, please – no matter how you feel about your job loss or who you may blame, LET IT GO. Forgive, forget and get on with life. You cannot skip this step. If you don’t do it, you could potentially have some toxic feelings nagging away at you that could disrupt your search for a new job and have you looking less than enthusiastic to potential employers.
What to do about the debt?
In my case, I’m able to keep up the minimum payments for several months. This allows for interest plus a small payment towards the principal. Before I run out of cash, if I do not have any income coming in, I’ll need to get more part-time work or take any full-time that comes my way. This, of course, is not optimal but may have to be done.
You could consider a consolidation loan to cut back on your debt payments. This will allow you to stretch out your payments over a longer period and reduce the payment itself.
If you have no buffer or emergency fund to dip into, you do still have options. Consider contacting a non-profit credit-counselling agency such as Credit Canada. They can advise you of your options, any consequences to your credit score and suggest a course of action.
Remember, don’t focus on the negative. Focus on the opportunity this is and find a job you love. Getting fired sucks – but it’s not the end of the world.